Supplier concentration and corporate innovation input

Meifeng Zou; Xindong Zhang

doi:10.3389/fpsyg.2022.879706

Supplier concentration and corporate innovation input

Front Psychol. 2022 Oct 24:13:879706. doi: 10.3389/fpsyg.2022.879706. eCollection 2022.

Authors

Meifeng Zou¹, Xindong Zhang²

Affiliations

¹ Economic and Management College,Taiyuan University of Science and Technology, Taiyuan, China.
² Economic and Management College, Shanxi University, Taiyuan, China.

Abstract

This paper studies the relationship between supplier concentration and corporate innovation input. The results show that a firm with a higher supplier concentration tends to have lower R&D investments and invention patents. Considering endogenous problems, this negative relationship is still robust by using the instrumental variable regression and propensity score matching method. Mechanism analysis shows that a firm with higher supplier concentration is impaired risk-taking capacity and occupied resources by the big suppliers. Our evidence shows that a deeper exposure to a small set of large supplier bears negative consequences for the firm. This paper sheds new light on the dark side of a high level of supplier concentration on corporate innovation.

Keywords: bargaining power; corporate innovation; resource occupied; risk-taking; supplier concentration.